Tuesday 5 September 2023
US bonds are being sold again as we saw on Friday after the NFP data and that means rising yields are once again creating USD demand after the Labour Day pause yesterday.
The RBA left interest rates on hold this morning for the third time in a row with no real change in rhetoric and AUD remains on the back foot with further pressure coming from Chinese economic concerns still. Bank of Canada the next CB in focus tomorrow.
Equities have fallen again amid the returning back story creating softer risk tones with JPY demand on the crosses helping to cap core pairs again while WTI has also retreated off its $85.75 highs and testing $84.80 this morning as I type. Gold finding support around $1935 again but capping above $1940 as the jury remains out and tight ranges prevail. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension but also the Middle East among other areas of conflict.
GBPUSD: Capping at 1.2640 in yesterday's tight range but has needed no excuse to fall back through 1.2560-80 support amid the renewed USD demand with further pressure from the risk-off GBPJPY supply and now posting 1.2530 as I type. I remain bearish on the UK and GBP overall. EURGBP: Holding 0.8545-50 again and heading into the pivotal 0.8580-area again with more two-way expected overall as core pairs make their mind up. GBPJPY: Back down testing 184.00 after capping at 183.30 on the softer risk tones with sellers ever poised as risk remains fragile. Also helping to cap core pairs again.
EURUSD: Friday's lows of 1.0770 now broken and capping as we fall further to test 1.0740-50 where we also have large option interest tomorrow. I remain a rally seller. USDJPY: Holding 146.50 yesterday but capping above 147.00 so far this morning amid the softer risk JPY demand.I remain a rally seller as preferred side overall with patience a virtue as ever and hedged versus shorts elsewhere.
More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from mike@mspfx.co.uk
Interbank rates: 08.40 BST
GBPUSD 1.2569
EURUSD 1.0757
EURGBP 0.8558
GBPEUR 1.1682
USDJPY 146.94
GBPJPY 184.68
GBPCAD 1.7155
GBPCHF 1.1130
GBPZAR 24.0420
GBPHKD 9.7687
USDCHF 0.8873
EURCHF 0.9544
EURHKD 8.3636
AUDUSD 0.6374
NZDUSD 0.5880
USDCAD 1.3656
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